The president is proposing significant changes to the Roth IRA, which has become a popular way for higher-income investors to leave money to heirs tax-free.

“The Obama team put this out in an effort to simplify tax law when it comes to retirement accounts,” says Matt Curfman, a financial planner with Richmond Brothers Inc. in Jackson, Mich. “Thank you, but no thanks…. It takes away from the planning benefits.”

Money goes into a Roth after it’s already been taxed, and earnings aren’t taxed. Unlike with traditional IRAs and 401(k)s, Roth owners currently don’t have to take annual distributions after turning 70½ – which means the money has even more years to grow if the owner doesn’t need it. And once the Roth owner dies, the beneficiary inherits the money tax-free. Though heirs must take minimum distributions annually from a Roth, based on their life expectancies, it’s possible that young beneficiaries could continue to leave most of the money untapped and growing for decades.

The president proposes that non-spouses inheriting a Roth – with a few exceptions – would have to withdraw the entire balance within five years.

Adding to the pain, Obama’s proposal would require the original Roth IRA owner to take distributions after 70 1/2 .

“That came out of left field,” says Jeffrey Levine, a certified public accountant and IRA technical consultant with Ed Slott and Co.

Accountants for years have touted the estate-planning benefits of a Roth.

For instance, those inheriting a Roth at age 51 would be expected to take annual distributions of 3 percent based on their life expectancy, Levine says. So if the Roth investments grow at a higher rate, the account balance would rise despite the distributions, he says.

The president also wants to cap the amount in all tax-sheltered retirement accounts, a proposal he has made before, at about $3.2 million. The cap would be adjusted for inflation. If a person’s balance exceeded that amount in a given year, the excess would have to be withdrawn.

“If people are able to save and can save a lot of money in retirement, I don’t understand why that is a bad thing,” Curfman says.

One positive note on the retirement savings front: Individuals with less than $100,000 in their combined retirement accounts would no longer have to take required minimum distributions – a benefit to those with modest 401(k) and regular IRA accounts, Levine says. However, he says, it’s likely many people in that category are taking distributions anyway to live on.

Whether any of these changes will become law is questionable.

“All of these proposals probably are going to require some level of congressional action to get through,” Levine says.

And that’s a hurdle that the president’s past budget proposals have had trouble overcoming.